Globe Metals in a corporate restructure will now focus solely on the Kanyika Niobium Project, and spin-out all other exploration assets. The company will also provide North American's with investment opportunities in the company through a TSX listing.

Globe Metals & Mining (ASX: GBE) has proposed a corporate restructure of the company to focus on its Kanyika Niobium Project, with all other exploration assets to be “spun-out” into a separate listed company, with a rare earth/Mozambique focus.

Globe will also look to expand the shareholder base to North America, with a dual list on the Toronto Stock Exchange, with the timing of this to coincide with the completion of the Definitive Feasibility Study for Kanyika.

The corporate restructure proposal would create a new wholly-owned corporate entity to hold the; Mount Muambe Rare Earths – Fluorite Project in Mozambique; Memba Titanium – Iron Project in Mozambique; Machinga Rare Earths Project in Malawi; and the Salambidwe Rare Earths Project in Malawi, which are currently owned by Globe.

The plan for the new entity is to be a publically listed company, with Globe shareholders to have an equal right to participate in the shareholding of the new entity. Post listing of the new entity, Globe will then look to dual list on the Toronto Stock Exchange.

Timeframe

Details of the spin-out and dual listing to be provided in due course, including time frames, regulatory and compliance hurdles and the nature and extent of shareholder participation in the new entity

Rationale for proposal; as outlined by Globe

1. Realise value for exploration assets – Globe’s share price is currently trading around cash backing, with little or no value being attributed to its projects, especially the Mount Muambe Rare Earth – Fluorite Project, as well as its other exploration (non-KNP) assets.

Given recent exploration success at Mount Muambe, it is anticipated that a separate rare earth focussed company with Mount Muambe as the primary asset would garner greater market interest than is currently the case.

2. Commodity focus – by separating Globe’s project portfolio into two companies, with Globe to focus on niobium exploration and production and the new entity to focus on exploration and development of other primarily rare earths projects, existing and prospective shareholders will have the ability to make simpler investment decisions based upon a single commodity play.

3. Funding of Mount Muambe – in light of recent exploration success at Mount Muambe, it is evident that this project will require extensive capital over the next two years and beyond, in order to deliver an initial JORC resource and feasibility study.

Funding this project from within Globe will inevitably create competition for capital internally, and may impinge upon the optimal development of that project.

4. Financing of KNP – the financing of the KNP post-DFS will be simpler if Globe is focussed solely on niobium.

5. Project Partners – by separating Globe’s projects into discreet commodities, it provides greater flexibility for the introduction of project partners, being either at the corporate or project level (with mixed commodity plays, the corporate level is often not viable, if there is a specific commodity interest).

6. TSX – the board considers that the TSX will offer a broad and deep market, particularly in the area of specialty metals such as niobium, which will complement Globe’s existing listing on ASX as well as make comparable company analysis easier.

This will facilitate more appropriate valuations for the KNP, especially as it approaches completion of the DFS.

Globe progresses Kanyika through DFS during 2012

As Globe progresses the Kanyika project through the DFS during 2012, its strategic partnership with ECE, a Chinese State Owned Enterprise and a major exploration, development and mining group based in Nanjing, will become increasingly important.

The DFS in anticipated to be completed in the December quarter of 2012, with Globe on track to commence production in 2015.

Highlighting the potential of the partnership, ECE will provide Globe with access to Chinese capital markets, partners and end users.

ECE has discovered more than 160 ore deposits in China with a potential value in excess of US$10 billion.

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